Financial Well-being
Investing
3 mins
Published:
March 21, 2025

Why Platform Fees Matter To Your Portfolio

Savings and investment platforms are businesses that need to make money in order to build features and serve customers. One way that platforms do this is by collecting platform and subscription fees.

But what do fees actually mean for your portfolio? What effect do they have over the long term? Let’s take a look, starting with the types of fees.

Subscription fees

Subscription fees are a flat fee that you pay for having an investment account. Just like your streaming service subscription, or your gym membership, the subscription fee you pay to an investment platform gives you access to their services.

Subscription fees are normally charged on a monthly basis. Some subscription fees might appear high or low compared to others, so it’s always worth checking what the subscription fee includes (e.g. 24/7 customer service, free withdrawals, or other features you may want).

Platform fees

Here’s where things get a bit more complex. Platform fees are based on the value of your portfolio. It’s all relative, however, meaning you’re not penalised for having less or more in your portfolio.

While the subscription fee (£2 per month, or £1 or £3 per month depending on the platform) is an easy one to calculate, knowing how platform fees affect your portfolio’s value in the long term requires a little more thought.

For example, let's say you had a £10,000 investment which you held for 5 years with a net return of 3% annually and the below varied fee structures:

0.10% fee → £11,536.57 (Net return: £1,536.57)

0.25% fee → £11,452.73 (Net return: £1,452.73)

0.30% fee → £11,424.90 (Net return: £1,424.90)

Choosing the right fee structure

As you can see, small changes in the platform fee can make an impact on your returns. It’s why it’s so important to:

Consider the whole life of your investment portfolio, and what it could be worth in 10, 20, or 30 years.

Carefully compare the fee structure of the platform you’re thinking of using, to make sure you’re getting the best trade-off between low fee rates, and high-quality service. For example, lower platform fees might come with higher fees for withdrawals, or mean that customer service isn’t as fast as you might like. 

As always, be prepared and do your research.

For more information on our pricing, visit our Pricing page.

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